Disruption – The Creative Reconstruction

India comfortably ranks third globally in the number of startups according to the latest Nasscom report. The number of startups in India is crossing 4,200 and still counting. The report further says that the Indian startup ecosystem will see funding worth $5 Bn by the end of this year. Out of these thousands of startups, some are poised to completely redefine their sectors.

Customers are readily accepting the new ways to travel, shop, make payments etc. Technology based innovative startups are seeing much traction from both the investors and customers. Having said that, the success metric for your startup is based on how you are not only improvising but also improving the existing mechanism. In today’s startup scenario, the word innovation & disruption is akin to survival. A true disruption is a business model innovation riding on the back of a technology innovation. So while this innovation is attracting investor attention and positively impacting the lifestyles of customers, the creative entrepreneurs are fighting a new kind of challenge – backlash from traditional business incumbents.

Stepping On The Toe

Disruptive innovation is oxygen for the startup ecosystem. Uber and Ola are disrupting the traditional taxi business, Flipkart and Snapdeal are driving customers away from brick & mortar stores, NoBroker, Housing, etc is disrupting the real estate sector, etc. The ‘disruption list’ as I would like to call it, is endless. There’s one more thing common between these startups – the resistance they are facing from incumbents. Maturing startups and fairly young ones are facing the heat at various levels and are getting resistance from sectors they never imagined when they started out.

A classic example is Uber. The cab aggregator is drawing flak not just from taxi operators, but also from the governments of various countries they are operating in. Then there is the case of leading electronic companies denying warranty for good sold through online ecommerce portals. But the resistance is not always Gandhian.

When the NoBroker office came under attack by brokers, it cast a shadow on the overall disruptive startup ecosystem. Around 40-50 brokers had gathered at the NoBroker office premises and tried to make forced entry with the intent of damaging property, battering employees and disrupting work. When we tried to stop them, the brokers resorted to verbal and physical assault. Some of our employees got assaulted, despite attempts of peaceful discussion. Luckily the police came in and prevented the situation from getting worse. However, owning to continuous threats, we had to move out of its office and was forced to work from makeshift offices.

There is no doubt that disruptive startups are stepping on the toe of traditional business incumbents. But old has to make way for new. Be it landlines – to cordless phones – to pagers – to mobile phones or books to kindle etc change is inevitable.

The Soothing Solution

Disruption should not be seen as a death knell for traditional business means. It’s only a way forward – another window of opportunity. Traditional business incumbents need to integrate with technology and excel.  If your customers are embracing the disruption, as a smart businessman you must pick the cue and follow suit. Technology can help infuse new life into slowing businesses. A suitable example here would be Samsung. The company was competing against giants like Nokia and Blackberry. The move of introducing smart touchscreen phones, turned the game around for Samsung and today it is the world leader in smartphones.

Even the creative entrepreneurs need to heed the fact that once their idea is implemented it’s no longer theirs alone. That idea has to shape and evolve in conforms of the regulatory environment it is breeding in. This however does not mean giving up on your disruption. I would once again like to use the example of Uber here. It ran into payment issues with RBI. But now the company complies its payment policy with RBI and has also implemented the option of cash payment in certain cities.

Smart adaptation will only help startups in fighting the battle more tactically and effectively. You are out there to make a dent. Sometimes taking a step back helps you pack more power in your next move.